Banks, loans, food: Xi's China faces crisis at home

Edited By: Palki Sharma WION
New Delhi, Delhi, India Published: Aug 31, 2020, 11.11 PM(IST)

China President Xi Jinping Photograph:( Reuters )

Story highlights

Chinese banks are bleeding and oil companies are on a slippery slope and China may be running out of food.

China's military is provoking its neighbours and is trying to grab territory. Xi Jinping wants to tighten control on Tibet.

But, he is ignoring the troubles that stare him in the face.

Chinese banks are bleeding and oil companies are on a slippery slope and China may be running out of food.

China's five largest banks have reported their biggest profit declines in at least a decade. All of them down by at least 10 per cent.

These five banks are:

  1. Industrial and Commercial Bank of China
  2. China Construction Bank
  3. Agricultural Bank of China
  4. Bank of China
  5. Bank of Communications

They all reported their results last week. All of them have lost billions of dollars in profits. The reason is quite simple. The government is plundering them.

The Chinese State has control over large banks. They all have been pressed into "national service".

These banks are being used by China to pump money into the economy...

To soften the blow --- dealt by the Wuhan virus.

Reportedly, Beijing has asked financial institutions to sacrifice 219 billion dollars. The banks will lose this money. They have been asked to lower lending rates and defer payments on loans.

This is how China plans to save its economy.

China's banks have to deal with almost 480 billion dollars worth of non-performing loans this year. This number --- comes from China's top banking regulator.

The China Banking and insurance regulatory commission. So profits have declined and the problem of bad loans --- is becoming too big to overcome.

China's biggest oil companies are losing money too. Sinopec is Asia's biggest refiner. It has reported a loss of 3.2 billion dollars. This is Sinopec's worst-ever loss over a half year period.

Petrochina is China's biggest oil producer. It has posted an even bigger loss of 29.98 billion yuan. That is a little more than four billion dollars.

Problem number three and this affects the people directly. China is running out of food. Xi Jinping tried to make a virtue out of necessity. 

He launched a clean your plate campaign. Tried to spin the shortage as a campaign to fight food wastage. He told people to consume less.

According to the campaign, a group of four in the restaurant should order only for 3 people. Nobody bought the special. 

That campaign has reportedly led to panic. The fears of a potential food crisis --- are now looking real.

According to a report, many farmers in China are hoarding crops. They believe that there will be a shortage of supply in this season.

Prices will rise so it is better to hold on to the crops.

This comes after a senior agriculture ministry official issued a statement last week. He said that consumers should not be "overly anxious" or even resort to "panic buying". It seems like the assurances are not working.

Xi finds himself in quite a soup. 

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